The beleaguered South African Post Office has painted a bleak picture of its finances, marred by profit losses during the 2022-23 financial year.
In its annual report tabled in Parliament, Sapo said its financial position has remained extremely dire.
The entity was placed on provisional liquidation in February 2023 and then in business rescue in July.
Sapo said it has experienced continued mismatch between monthly revenues generated and corresponding operating expenditure, resulting in a deficit to meet monthly financial obligations.
It blamed its woes on the loss of customers and planned revenues due to the cash flow effects and consequent non-payment of critical suppliers.
“The low revenues have further contributed to the non-payment of critical creditors. Outstanding liabilities at 31 March 2023 amounted to R9.5 billion, with statutory payments of R2.4 billion.
“Statutory liabilities include R1.1 billion for the Post Office Retirement Fund, R539 million for Sars, R596 million for Medipos medical aid and R108 million for UIF,” it said.
Sapo also said amounts owed to creditors, rentals, and accruals totaled R2.7 billion.
“Unpaid trade vendors and property rentals continue to negatively impact on Sapo's ability to recover lost revenue to move to financial sustainability.”
Sapo owed R212 million to former employees for voluntary severance package payments that are paid on a monthly basis.
The entity said 122 branches have been closed during the financial year under review.
The institution’s workforce was reduced from 14 460 as at 31 March 2022 to 12 640 at March 2023.
“The reduction in headcount was due to resignations, deaths, dismissals, ends of contract, retirement, and the implementation of the voluntary severance package programme.
“From the inception of the introduction of voluntary severance packages in December 2022 to March 2023, 1 891 employees were approved for the VSP.”
It also said in order to address the high employee cost base, a Section 189 process commenced, with notice given to unions in March 2023.
“Due to the provisional liquidation, the Section 189 process has been placed on hold until finality in the matter is reached,” it said.
CEO Nomkhitha Mona said Sapo was at a critical point in its existence.
“Costs have continued to exceed revenue, resulting in increasing outstanding liabilities,” Mona said.
“The slow development of a revised business model, together with a largely fixed cost base, lack of technology and infrastructure investment, low product development and innovation, poor operational performance, underfunded Universal Service Obligation and poor enforcement of the reserved postal area have exacerbated the decline in financial performance of the organisation,” she said.